The second session of the 28th Alaska Legislature opens Tuesday in Juneau with big work left over from the first and brand-new issues to confront, including possible state investment in a liquefied natural gas project, shortfalls in education spending and a weakened budget position.
From his third-floor suite in the Capitol, Gov. Sean Parnell will be monitoring and attempting to influence the 60 lawmakers on his initiatives. That task is made easier with one-party rule in Juneau -- Parnell is a Republican and so are majorities in the House and Senate.
But nothing in politics is a given, as was clear from bipartisan opposition in the Senate to Parnell's major development bill in 2013, House Bill 77. The bill, which would cut back environmental protection for rivers and limit public involvement in projects on state land, couldn't attract a Senate majority, and now Parnell is agreeing it should be amended.
Alaska's politics can be quirky, and the looming 2014 elections are likely to amplify the noise and disputes. Parnell will be facing the voters, as will nearly all legislators, some in dramatically different districts than the ones that elected them in 2012. A set of likely August ballot measures -- to repeal the 2013 oil-tax cuts, to legalize marijuana, and to increase the minimum wage -- will also seep into this year's session, schedule to adjourn April 20.
Last week, Parnell sat down for a 40-minute question and answer session with two of the Anchorage Daily News reporters who will take shifts covering the Legislature, Richard Mauer and Lisa Demer. The interview took place around a small conference table in Parnell's Anchorage office in the Atwood Building. Here's a transcript, edited for length and clarity, with occasional notations providing context.
ADN: So -- the Legislature is opening, it's not quite a fresh start because it's the second session. ...
Parnell: It's still a fresh start. Every start of a legislative session is a new beginning.
ADN: What's the hot stuff -- what are you pushing, what do you think is going to be pushed on you or on the Legislature this year?
Parnell: The most important item is to keep opportunity alive for Alaskans and to grow it. How that takes place in the legislative session, from my standpoint, will be through gas line legislation, through education legislation and through the budget reforms -- for instance, the unfunded pension liability and addressing that in a way that pays down debts so our kids aren't left with as much as they have today.
ADN: You've got an all-Republican Legislature, a Republican in the governor, basically it's a one-party state.
Parnell: I don't believe that for a minute. We have a lot of Alaskans who don't identify with a party, and I represent all Alaskans. I don't see it that way.
ADN: But the political reality is that you don't have a bipartisan Senate that had a lot more stopping ability or some of its own initiative. You wouldn't have gotten Senate Bill 21 (the oil tax cuts) last year.
Parnell: Sure, the majorities are aligned philosophically.
ADN: You see that as a good thing? Do you miss opposition?
Parnell: I'm not going to second-guess the voters. I think they sent the right people to the Legislature; but secondly, there's plenty of opposition to go around.
NATURAL GAS PIPELINE
ADN: Is the state investing in a gas line project for the direct return it would bring the state or is it really to subsidize the project as a way to make it happen. What's the goal?
Parnell: The goal is maximum benefit for Alaskans through Alaska's resources. When that royalty study and cost-and-tax study was completed by the state's experts last fall, that study demonstrated that Alaskans would be better off in this kind of gas line project -- the Alaska LNG project -- by taking an ownership interest in the line. ... That's why I proposed Alaskans owning a stake in this gas line.
ADN: What are you projecting the rate of return to Alaska to be with your investment?
Parnell: I think those kinds of questions need to be addressed throughout the legislative process, and it depends upon what kind of structure the Legislature allows us to go forward with. Those are questions which once the guidance documents are signed, put in front of the Legislature, the enabling legislation is put in front the Legislature, Alaskans can fully vet what's before them and we can address those kinds of questions.
ADN: At this point, you don't know that answer?
Parnell: That answer is subject to so many variables at this point that it doesn't have an answer until you give me the set of inputs you want to assume.
ADN: Will the gas line project not happen any time soon unless the state invests? Are you convinced of that at this point by steering away from AGIA (the Palin-era Alaska Gasline Inducement Act)?
Parnell: The Alaska Gasline Development Corp. is proceeding on the ASAP (small diameter in-state gas line) project irrespective at this stage of what happens with Alaska LNG project. If the Alaska LNG project somehow falters, the Alaska Gas Line Development Corp.'s smaller volume line will still continue forward. For example, if the Legislature turns down the enabling legislation that I put before them, we intend to still move forward to any open season in the first quarter of 2015 on that line. The priority is to get Alaska's gas to Alaskans first and then to move forward to markets beyond. I intend to work every avenue I can to get gas to Alaskans.
ADN: How transparent is this whole process going to be? What kind of public records are you going to have?
Parnell: So we have actually changed the conversation towards more transparency than where it was before. The Stranded Gas Act, the Alaska Gasline Inducement Act, both assume that there would be one "big-bang" contract at the front end and then the parties would go off and build that gas line. So there was basically one time where the Legislature and the public got to see what was being negotiated. The process that I have defined to get us our gas is one of commensurate, proportionate steps for the producers. It's basically that verify-trust, verify-trust, stage-gated approach. So for example, the Legislature and the public will see the guidance documents, which are the very high level commercial documents, they'll see the enabling legislation, and the public will know that if those are approved, the state will move into pre-FEED (front-end engineering and design) with the other parties and is committed to the pre-FEED dollars of a partner.
ADN: On education, ... do you want to see some of those limited public dollars go to private schools, religious schools?
Parnell: I want to see public dollars benefiting Alaskan children. There are multiple ways that can occur. I think the debate has been far too long on one side saying, "give us more money, we need more money and everything will be just fine," and the other side saying, "show us the results, we want to see results before we get more money." I'm going to propose a path that brings those two sides together and forges a compromise for the benefit of our kids
ADN: Just on the religious schools, is that something that you want to see, the opportunity for parents to say that they want their public school dollars to go toward a private school for their child? Do you want that to be law in Alaska?
Parnell: I will support anything that gives parents more choice in public education. I can tell you my focus will be on charter schools. When we have a public school called a charter school that has a wait list of with hundreds, they're doing something right. We ought to be replicating that.
ADN: So on bringing the two sides together, what are you proposing? You've mentioned charter schools; is that what it's about?
Parnell: I'll have to lay it out in my State of the State, and we'll let you hear it then.
ADN: You're giving us the little sneak peek and it has something to do with charter schools?
Parnell: That's part of it, but I really wanted to focus on the two sides of the debate, the "give me more money" and "show me the results," and I think we can bring both together here.
ADN: But there's a third side and the third side says, "I want to educate my child the way I want to educate my child, and I want to educate my child in a private school or a religious school;" it's nothing to do necessarily with results. "This is my philosophy, I want my child to get an X education."
Parnell: And why do you think that is? It's because they want to see a different result for their child. ... But for too long, it's either been about "give me the money" or "show my the results," and I know we can work this problem together and solve it.
ADN: With public money for religious schools, if that comes out to be the way it goes?
Parnell: I think you're going to need to wait for my State-of-the-State speech.
DEVELOPMENT, ENVIRONMENT AND Senate Bill 77
ADN: On House Bill 77, do you at this point regret the broad language in that bill, the "notwithstanding" that's kind of become a lightning rod in this measure? (Through the term "notwithstanding," the bill says it takes precedence over all other Alaska environmental law.) Do you think that needs to be changed, or do you like that broad kind of language.
Parnell: I think it needs to be changed. I think the public process has been good about showing that.
ADN: So it sounds like you will agree to some changes in this bill as it sits in Senate Rules.
ADN: And aside from the "notwithstanding" language, what about the water rights question, the water reservation question.
Parnell: Still looking at that. I still believe it's in the public's interest to have a public entity hold a water reservation rather than a small subgroup of the state having total control over water that belongs to all citizens.
ADN: Does man have dominion over the world?
Parnell: What does this have to do with the ...
ADN: Has to do with environment and the way someone administers the state. I'm just wondering what you believe.
Parnell: I believe that my obligation is to honor and follow the constitution and I have that obligation to conserve and develop the resources of this state for the benefit of our people, and that's what I'll do.
ADN: But in terms of seeing what the role of human beings in the state, on the planet, that says something to how you're going. ... Could you say what you believe in that regard? Does man have dominion over the world?
Parnell: I will put the needs of the people of Alaska at a higher level than preserving a piece of land in Alaska, if that's what you mean. At the same time, my job is to conserve and develop Alaska lands in accordance with the provisions related to natural resources in the Constitution, and I'll do that.
ADN: Is there ever a time when the state should be protecting endangered species, protecting habitat?
Parnell: We do it all the time and we do it through regulation and we do it through the permitting process. We spend millions of dollars on that process.
ADN: Do you have a science adviser?
Parnell: Not a straight science adviser but when it comes to questions relating to DEC and water quality, we have people who are expert in water quality as DEC. And when it comes to fisheries and fish habitat, we have experts in those areas that I call on.
ADN: Do you have someone in particular that you tend to go that you just would rely on as a good solid source when you've got science questions.
Parnell: Let's go back to the session, what's going to happen. What do you want to ask about the session?
ADN: I'm curious if there is someone. Maybe there's not, just on science because it's an area we're interested in.
Parnell: No, if I have a science question related to the work I do here, I go to a commissioner and I say, "Commissioner, I got a water quality question, who in your department can help me answer that question." That's what I do.
ADN: Is there any compromise that you can see regarding Medicaid expansion?
Parnell: Right now my focus is identifying those (coverage) gaps I spoke to, and health-care provision for that population and working to address those. And secondarily, to address the Medicaid reform and restructure proposals across the next year that I described as well. That's where I've turned my focus to. The Legislature can direct a different course of action, but my focus is different (from Medicaid expansion) at this point.
ADN: Couple of big projects I wanted to ask about: the proposed Pebble and Chuitna mines. Do you see any way they could possibly be developed without harming the salmon? You've said that you won't trade one resource for another. Can you see that that's even possible (to develop those mines without harming salmon)?
Parnell: Not with some of the assumptions you're making, but I can see with a change in project scope perhaps, or in project direction. Until we have an actual permit in hand, for instance, on Pebble, I can't even answer that question without trotting deep into the realm of speculation.
ADN: But what were the assumptions?
Parnell: I think you're assuming large-scale open pit mine as was constructed, hypothetically in the EPA assessment, for example. ... Again, my focus has been on making sure that the permitting process works to bring forth the science, bring in public input and then make that kind of decision. The reason we have a permitting process is because we treat seriously the threat to fisheries and we treat, also seriously, the economic benefits to our people from our resources that they are supposed to have.
TRIBAL JURISDICTION IN ALASKA
ADN: What's going to be your response to the Indian Law & Order Commission, that big, embarrassing chapter on Alaska (that said the state was failing in its duty to protect people in the villages, especially from domestic violence and rape)?
Parnell: In what form?
ADN: Is there going to be a legislative response, are you ignoring it, are you saying we're doing what were doing already -- do you have a reaction or a response, a policy response or an action response to what they said?
Parnell: My response is that I felt some of the comments were off base and from a policy standpoint, I think we've made great strides when it comes to putting Village Public Safety Officers into communities that didn't have any before, we've made strides in opening up foster care possibilities for tribes, transportation funding for tribes, courts for tribes. While I think we have a long ways to go, I thought the Outsiders speaking to Alaskans was a bit misinformed about what's actually happening.
ADN: Although there was a lot of input from Alaskans. ... You talked about courts, but part of what they were saying was (to add) criminal jurisdiction for (tribal) courts. ... And I know you've opposed things like that in the past. Would you continue to oppose that?
Parnell: We have proposed on a limited basis working with tribal courts when it comes to alcohol and domestic violence cases on a pilot project. I don't support subjecting Alaska citizens to disparate rights and disparate laws. When I had confirmation from the board of the Alaska Federation of Natives that we could proceed with constitutional rights, meaning the basic civil rights being afforded to every citizen and that we could negotiate agreements on that basis, that's when I moved forward.
ADN: Alaska Constitutional rights or U.S. Constitutional rights? Because they're required to operate under the U.S. Constitution.
Parnell: I just said, civil rights afforded, I did not specify in that conversation.
KNIK ARM BRIDGE
ADN: Knik Arm bridge -- can you just justify the use of state funding for that? First it was billed as, "this project will pay for itself," and then they kind of backed off on that slowly and now it's evolved into, "Hey, the state pays for roads, we should pay for this bridge." Can you just explain your thinking on that?
Parnell: Less cost, less risk to the state. The P3 (public-private partnerships, which are built and operated by private contractors and backed by the state) projects are no longer being financed in the way they were when that was first proposed. The exposure to the state of that particular way forward was not something that either legislators or I were willing to take. The more common public means of financing infrastructure is lower-cost, lower-risk to Alaskans, and that is why I made that proposal after consulting with Commissioner (Angela) Rodell of Department of Revenue and the financial community on what was possible.
RELATIONSHIP WITH THE FEDERAL GOVERNMENT
ADN: So one more question on the relationship with the feds. Back at statehood, the feds were the ones who were promoting over-exploitation -- fish, fur, timber -- and the state was saying, 'Whoa, we need to be more sustainable, get out of here. ...'
ADN: So we had statehood. Now, it seems, that your fight with the feds is almost always about them slowing development, them saying the state is the one that's doing the over-exploitation. Look at the bears on the Kenai, look at the belugas, whatever you want to say, whether you agree with the science or not, what they are saying is, "You are overexploiting your resources." Is the state now in the position where the feds were at statehood?
ADN: OK, why not?
Parnell: Clearly not, because we're managing our fisheries sustainably, because we have robust permitting processes for oil and gas exploration, for mining. Today, it is very difficult to get any project of any scope, even down to a coffee shack that wants to move its location and has to get a Corps of Engineers wetlands permit and spend an extra $30,000 on a $90,000 piece of property. I'm basically just trying to protect Alaskans from that kind of overreach, as I see it, and give them opportunities they ought to have.
(His press secretary, Sharon Leighow, called for one last question.)
ADN: On marijuana.
Parnell: You're not going to get me talking about a ballot initiative.
ADN: What about marijuana? Do you see any upside to the state, should it become legal, in the form of control -- a lot of conservatives support legalization, as the war on drugs has not really gone that well. Is there an upside to the state with legalization -- taxes, control, anything.
Parnell: I'm not going to go down that road because someone will accuse me of taking a position in my state office on an initiative and that will generate a lawsuit.
ADN: I'm just asking you as governor: any upside? As a conservative, a lot of conservatives support that. What do you think about legalization? Forget there's even a ballot initiative.
Parnell: I don't support legalization of marijuana or any other gateway drug, but again, that will be the people's choice in August. That is not something that I am free to advocate or oppose. All right, thanks.
This story was updated to correct a dopped word, "don't," in Gov. Parnell's response to a question about one-party rule in Juneau. Parnell said: "We have a lot of Alaskans who don't identify with a party, and I represent all Alaskans."
By RICHARD MAUER and LISA DEMER
Anchorage Daily News